IT: Changing the way the world does business

Forget about mergers and acquisitions as the ideal way to achieve efficiencies and economies of scale. On-line collaboration can also offer demonstrable benefits to the pharmaceutical industry, says Dr David Rooke

The global pharmaceutical industry has witnessed a wave of merger and acquisition (m&a) activity in recent years, with major corporations looking to build integrated portfolios of products that span all sectors of the most profitable markets. In other industries, such merger mania will often be justified to shareholders by arguments about economies of scale (for example, it increases efficiency, it minimises duplication of effort, or it lowers the risk), but in the pharmaceutical industry such explanations may carry little weight.

Indeed, m&a activity may actually hamper efficiency. Individual pharmaceutical corporations are usually quite efficient at what they do. They have developed their own culture, their own procedures, protocols and quality systems to take products from research discovery to profitable commercial realisation.

In r&d, the major costs come after the initial research phase, and a takeover, particularly an international one, can actually slow down the new chemical entities (nce) process. New corporate structures interfere with the existing system, changing risk policies and increasing costs – sometimes quite dramatically.

Instead of building global corporations and imposing inappropriate bureaucracies on what were productive r&d operations, today's pharmaceutical businesses should seek to capitalise on the distinctive cultures and working practices of its existing employees. In particular, information technology (IT) has great potential value to improve and accelerate the vital collaboration that underpins pharmaceutical nce work.

But won't many scientists worry that electronic collaboration could impose a technological strait-jacket similar to the bureaucratic one experienced after merger and acquisition activity?

If we were talking about large ERP-type (enterprise resource planning) systems, then that would be a concern. But the new generation of collaboration systems are comparatively quick to implement, quick to learn, highly customisable, and can be easily integrated with existing office, technical, and corporate IT infrastructures. As something of a late adopter of such technology, the pharmaceutical industry is also benefiting from lessons learned when collaboration systems were adopted by other industries.

In the past, another IT approach, electronic document management systems (EDMS), promised the utopian 'paperless office', and aerospace and automotive companies quickly saw the potential. However, the solutions tended to be suitable only for large businesses where authorised staff could access drawings, specifications, manuals, etc. via a local or wide area network.

Where the products, projects or processes involved a wider team and multi-media – for instance, a whole supply chain with many geographically dispersed outside companies – EDMS systems proved both expensive and inflexible.

e-collaboration benefits

The explosion in use of the Internet, however, spawned new, web-based collaboration technologies. Today, businesses no longer need to invest in lots of new software and hardware to communicate; some systems require only a conventional PC and an Internet connection to exploit new collaborative methods made possible by IT.

Collaboration has long been a feature of the science-based pharmaceutical industry. Disparate teams of specialists in different parts of the world work on various aspects of development, and they all need to share and exchange information in a regulated and validated environment. The form and content of that information will vary between different teams, different products, and different regulatory regimes, but ultimately it can all be communicated electronically.

The big systems integrators and business collaboration systems providers, such as MatrixOne, are now focusing on the global pharmaceutical market. Having delivered systems to medical high-tech companies working within rigorous regulatory regimes, MatrixOne recognises that pharmaceutical businesses face similar pressures. At the product level, there is a drive to cut complexity and costs and get better products to market quicker, but there are also benefits in terms of knowledge management across projects, and in providing access to all relevant information when making marketing or manufacturing investment decisions.

time and cost savings

A research team may examine around 5,000 compounds, of which only five reach clinical trial and just one makes it to commercial production. Using a collaboration system, information on those other 4,999 compounds, in particular the detailed information for those five that do go through the clinical screening and development process, can be made available for future reuse, even by other teams in other projects. In new product development, faster pre-clinical assessment of compounds and a rapid, parallel development train can save a pharmaceutical company millions.

Technology transfer decisions can also benefit from e-collaboration. A company's marketing team might identify a new overseas opportunity, or the company may simply need to reduce its cost base.

All information about an approved master formula, its production process, and packaging can quickly be collated and submitted for regulatory evaluation and approval, if, for example, the company wanted to relocate production to another country. A regulator can quickly view a complete audit trail concerning any compound, the processes, any item of equipment, its operation and maintenance procedures, qualifications and training processes for operators. Any consequent changes can be quickly discussed, documented, and signed-off electronically.

cutting the time

With the US Food and Drug Administration moving towards a goal of only electronic submissions for new pharmaceutical products by the end of 2002, companies that are already managing their data electronically will have a head start in the approvals process.

But businesses embracing e-collaboration will already be cutting the time taken to reach the regulatory approval stage. With time-to-market so often the key variable in getting a new product to market, using new, collaborative methods to expedite the process from discovery to commercial benefit is set to become a dominant theme in the industry.